CABINET has given the energy ministry the nod to commence negotiations with Exmar Consortium for establishing a floating storage and regassification facility at Port Esquivel, St Catherine, that will result in Jamaica enjoying cheaper and cleaner natural gas by 2013.

The move to natural gas is the centrepiece of the Government’s plan to diversify its energy sources and reduce its reliance on petroleum-based fuel.

The decision also clears the way for a number of initiatives that could inject life into the bauxite sector, which has been in a slump since late 2008, when the worst economic recession to hit Jamaica since it has been governed by Jamaicans forced three of the four alumina plants to close and the one crude bauxite importer to cut production by half.

Since, owners of one of the plants — Windalco’s Ewarton plant — said it will recommence operations in June but no indications have yet been made about potential reopening dates for the other two plants while rumblings from within the mining ministry point to prolonged closures lest the cost of energy in Jamaica is reduced.

Just last week, the Office of Utilities Regulations (OUR) approved a 4.6 per cent increase to non-fuel electricity rates to industrial customers of the sole distributor of electricity, Jamaica Public Service Company (JPS), while residential customers will experience an increase one percentage point lower.

The use of natural gas is also expected to lower the cost of electricity to consumers as generators now fired by petroleum-based fuels would be converted to burn natural gas.

Exmar — a Belgium-based firm — emerged the successful bidder from a November 2009 request for proposal for the establishment of a floating LNG regassification terminal that would be financed by the developer.